Yin Gang/Xinhua via Getty) (Xinhua/Xinhua via Getty Images
- Just four Chinese ETFs have attracted $4.4 billion in inflows over just eight trading days.
- The FT reported growing speculation about a state-run buying spree.
- Beijing's "national team," or state-affiliated institutions, could be intervening to prop up the market.
Chinese markets could be in the midst of a state-fueled boost as four exchange-traded funds see huge inflows over the last two weeks, according to a report from the Financial Times.
The FT cited data from Shanghai-based firm Z-Ben, which found that four ETFs have received $4.4 billion in inflows in eight trading days. The data has spurred speculation that Chinese markets are being propped up by Beijing's "national team," referring to large state-affiliated companies.
At the July 24 politburo meeting, policymakers pledged to support the economy and "expand consumption by increasing residents' income," per the FT, and the spike in ETF inflows supports that messaging.
The CSI 300 has climbed 5.7% in the two weeks after those statements before pulling back at the end of last week. The index is about 33% below its peak seen in February 2021.
The Huatai-PineBridge CSI 300 ETF, the biggest of the four being tracked, has become the first fund besides money market fund vehicles to reach $13.8 billion assets under management, according to Z-Ben.
The consultancy's head of research, Ivan Shi, told the FT it's difficult to determine if the national team is involved.
"My view is that the flows in the past two weeks are different from the flows over the past three years," Shi told the FT. "Whether it's the national team or not, I don't know. But I suspect there might be some national team element in there."
Meanwhile, China's economy at large has failed to bounce back as expected after its pandemic lockdowns. Beijing must now navigate an unstable housing market, unfavorable demographics, and deflation, which has led some experts to draw comparisons with Japan's economic crisis in the 1990s.